Fresno, Like Some Other Troubled Municipalities, Has Little Margin for Error

FRESNO, Calif.—In April, the mayor of this Central California city stood in front of municipal employees in a darkened room as bad news glowed on a large screen behind her.

"Our problem is we have no money in the checking account at all," Mayor Ashley Swearengin said to the silent room. "None." The situation was so dire that covering an unexpected expense—a new air-conditioning unit or firetruck, for example—would...